Disney Stock News & Earnings

[Hoodie]

As a shareholder I wholeheartedly agree to a change being needed at the top

I am just dumbfounded that it seems no one outside of Disney groups is discussing how badly the stock is doing. At what point can shareholders starting questioning the fiduciary responsibility of the Board and Chapek? It's down 35% for the year while the Dow is actually UP. Something is gravely wrong at Disney Corporate.

 

[Obi-J Kenobi]

Not getting into the politics of this, but when you look at the financial weight this will lift off of Disney, and place back onto Florida, it is pretty substantial. Disney would no longer be footing the bill for any of their infrastructure, (Roads, water, electricity, ect...) and on top of that, they would stop conducting inspections on all of their property, (ie rides, hotels, restaurants, ect...)

Purely from a financial standpoint this isn't a bad thing, i haven't weighed into the restrictions that may be levied against Disney if this changes, and would love if someone could enlighten me on it.

RCID is a dream come true from a development standpoint: all of its land is exempt from all county and most state regulations, such as development-impact fees, environmental-impact fees or costly and time-consuming regional-impact studies. Build whatever and wherever. The district writes its own zoning rules with the actual developer's guidance and pen. The district is regulated by building codes drafted with the actual developer's guidance and pen. Waterways, utilities and sewer systems are built to suit the developer's needs, not the communities needs in a general sense. The district is governed by a ruling body that is handpicked by the developer, i.e. The Walt Disney Company. Now, TWDC is forced to have to build, maintain and improve the property under the same regulatory environment and guidelines as other companies in Floridan and the local counties where the land is located. That type of development is going to be substantially more expensive to TWDC. This results in higher costs to TWDC and worse bottom line.

TWDC has save millions upon millions upon millions in interest by using tax-exempt bonds rather than conventional borrowing of money the way other companies do. Frankly, I would not be shocked if TWDC has saved over a billion dollars in interest payments. I haven't studied TWDC's books and that is purely a guess. For many, many years no one seemed to speak up about RCID's ability to bond debt. Well, then in 1986, the US Congress aimed to trim the federal deficit by limiting the availability of tax-exempt bonds. Thereafter, in or about 1988, the cuts really hit local municipalities hard when the State of Florida's bond dollars pool was drained. Suddenly RCID was competing with, and beating out, other local municipalities, including, Orange County, for the right to use those bond dollars. My understanding is that RCID was beating Orange County so badly that Orange County couldn't bond for low-income housing to service the citizens of Florida. At least, that's my understanding of what happened in the late 80s with Orange County.

So, there is a general question of whether or not the purpose of the bonds are being used for a public purpose when WDW gets the benefit. There is definitely a positive public benefit to a thriving theme park, but is that the point of municipal bonding: building Galaxy's Edge in DHS or affordable housing at another location inside Orange County? The more specific question is whether or not TWDC is going to see increased financial liability when it has to borrow in a more conventional manner (i.e. from a bank) and have to pay interest on its loan. I am going to assume banks are going to demand TWDC pay interest on a loan.

Finally, there is a significant tax issue for TWDC. TWDC owns its own gas, electric and water utilities on WDW property. It leases the utilities to RCID for millions of dollars annually. Because RCID is a municipal government, for a lack of a better term, it can use the tax-exempt bonds (noted above) to, expand, maintain and improve the utilities. RCID then charges TWDC for the gas, electricity, water, sanitation and sewer services TWDC uses to operate the parks and resorts. TWDC (I think because I'm not an accountant) then deducts those utility costs from its income tax returns, saving millions of dollars in tax liability over many years.

In my opinion, TWDC has done an exemplary job of providing strong services and improvements to its guests without straining the local counties and the larger taxpayer base. It is my further opinion that RCID constitutes corporate welfare, pure and simple. Both of my opinions can and do exist at same time. There is good and bad with RCID. Anyone who speaks in absolutes about this subject is really looking at this issue with a tribalist mind-set, in my opinion.

 

[Disney Bobby]

Wow. I can't even imagine what is going thru Walt Disney's frozen head below Pirates right now.

 

[Ms Bibbidi]

Governor DeSantis has signed the bill as of this afternoon 4/22/2022.

 

[jerry557]

I am just dumbfounded that it seems no one outside of Disney groups is discussing how badly the stock is doing. At what point can shareholders starting questioning the fiduciary responsibility of the Board and Chapek? It's down 35% for the year while the Dow is actually UP. Something is gravely wrong at Disney Corporate.

No one in management seems to care. Politics is apparently more important to them. If I were still a shareholder, I’d be extremely concerned.

 

[Mai Ku Tiki]

No one in management seems to care. Politics is apparently more important to them. If I were still a shareholder, I’d be extremely concerned.

As a shareholder, I'm concerned. But I'm also convinced that everything is being looked at behind the scenes....Wouldn't expect the legal team to encourage public statements til all their Donald's are in a row.

No idea whether the results will hurt or benefit shareholders, but I think nobody in the boardrooms are sleeping well these days. I think they care-Desperately.

 

[JARNJ3]

As a shareholder, I'm concerned. But I'm also convinced that everything is being looked at behind the scenes....Wouldn't expect the legal team to encourage public statements til all their Donald's are in a row.

No idea whether the results will hurt or benefit shareholders, but I think nobody in the boardrooms are sleeping well these days. I think they care-Desperately.

I have always expected a lawsuit, and that they were waiting for it to be signed before they filed.

Let's say - worse case - RCID is never reinstated - what does that mean for the theme parks? No more process improvements, no new development because it would take too long to get permits, etc?

Could they actually shut down or limit capacity significantly if there are enough fire fighters, police etc?

 

[Ms Bibbidi]

I actually doubt that dissolution of the Reedy Creek Improvement District is going to have very much impact on DVC owners, Disney Fans or Passholders.

The local counties, cities and other districts are likely to create a Joint Powers Agreement and multi-jurisdictional JPA agency to provide municipal services to the Disney region once governed by the RCID and get the bonds administered and paid. Disney will end up paying the bonds either directly or indirectly through that new agency. as they benefited from them. Historically, Walt Disney and his company asked for the RCID. It was not initially proffered as an incentive to get Disney to move to Florida. It was never intended to be permanent. When Florida created the legislation for the RCID, Florida had not yet passed legislation enabling multiple public entities to form Joint Powers Agreements and for multi-jurisdiction agencies to govern projects like this -- that came a few years later. In the meantime, they handed over some governing powers to a private entity. Many, many times public entities have revisited that tactic. It generally happens when the public entities cannot provide up front financing for the infrastructure.

Now it is done very differently and as part of the terms and conditions of the development permits, the developer is required to pay for it while the public entities retain their governing powers. So, after passing the JPA legislation, local governments have a tool to use so the traditional governing functions can be retained or returned to the traditional governing bodies. Terminating the RCID has been a topic on the table for some time and they kick started it to get it done. Now they have 13 months to implement it.

The parks are still booming. Disney's broader management has the skills to get through this. Mr. Chapek's term may be shorter or he may survive this. Very unknowable at this time. Overall though, people internationally still love Disney. They will right the ship soon. Now might be a great time for Disney fans to buy Disney stock.

 

[Ms Bibbidi]

No matter how big the numbers, it is still a "tempest in a teapot."

 

[Jrb1979]

I actually doubt that dissolution of the Reedy Creek Improvement District is going to have very much impact on DVD owners, Disney Fans or Passholders.

The local counties, cities and other districts are likely to create a Joint Powers Agreement and multi-jurisdictional JPA agency to provide municipal services to the Disney region once governed by the RCID and get the bonds administered and paid. Disney will end up paying the bonds either directly or indirectly through that new agency. as they benefited from them. Historically, Walt Disney and his company asked for the RCID. It was not initially proffered as an incentive to get Disney to move to Florida. It was never intended to be permanent. When Florida created the legislation for the RCID, Florida had not yet passed legislation enabling multiple public entities to form Joint Powers Agreements and for multi-jurisdiction agencies to govern projects like this -- that came a few years later. In the meantime, they handed over some governing powers to a private entity. Many many times public entities have revisited that tactic. It generally happens when the public entities cannot provide up front financing for the infrastructure.

Now it is done very differently and as part of the terms and conditions of the development permits, the developer is required to pay for it while the public entities retain their governing powers. So, after passing the JPA legislation, local governments have have a tool to use so the traditional governing functions can be retained or returned to the traditional governing bodies. Terminating the RCID has been a topic on the table for some time and they kick started it to get it done. Now they have 13 months to implement it.

The parks are still booming. Disney's broader management has the skills to get through this. Mr. Chapek's term may be shorter or he may survive this. Very unknowable at this time. Overall though, people internationally still love Disney. They will right the ship soon. Now might be a great time for Disney fans to buy Disney stock.

I disagree. I don't think they are going to close or go bankrupt but I think it will be awhile before things get turned around. Right now the parks are packed due to revenge travel going on. Once that's over I think the parks will be in for a down turn for a few years.

 

[Aluminum Falcon]

I actually doubt that dissolution of the Reedy Creek Improvement District is going to have very much impact on DVC owners, Disney Fans or Passholders.

The local counties, cities and other districts are likely to create a Joint Powers Agreement and multi-jurisdictional JPA agency to provide municipal services to the Disney region once governed by the RCID and get the bonds administered and paid. Disney will end up paying the bonds either directly or indirectly through that new agency. as they benefited from them. Historically, Walt Disney and his company asked for the RCID. It was not initially proffered as an incentive to get Disney to move to Florida. It was never intended to be permanent. When Florida created the legislation for the RCID, Florida had not yet passed legislation enabling multiple public entities to form Joint Powers Agreements and for multi-jurisdiction agencies to govern projects like this -- that came a few years later. In the meantime, they handed over some governing powers to a private entity. Many, many times public entities have revisited that tactic. It generally happens when the public entities cannot provide up front financing for the infrastructure.

Now it is done very differently and as part of the terms and conditions of the development permits, the developer is required to pay for it while the public entities retain their governing powers. So, after passing the JPA legislation, local governments have a tool to use so the traditional governing functions can be retained or returned to the traditional governing bodies. Terminating the RCID has been a topic on the table for some time and they kick started it to get it done. Now they have 13 months to implement it.

The parks are still booming. Disney's broader management has the skills to get through this. Mr. Chapek's term may be shorter or he may survive this. Very unknowable at this time. Overall though, people internationally still love Disney. They will right the ship soon. Now might be a great time for Disney fans to buy Disney stock.

i agree, this was always going to cause waves in the market. Now we find out if they were warranted, and personally I doubt it lives up to all the negative hype

 

[Aluminum Falcon]

I disagree. I don't think they are going to close or go bankrupt but I think it will be awhile before things get turned around. Right now the parks are packed due to revenge travel going on. Once that's over I think the parks will be in for a down turn for a few years.

I've heard about revenge travel for over a year now, a lot of people seem to grind their axe to it. I agree it is more packed now then normal, but there is nothing that would even remotely point in the negative direction once the "high" demand starts to come back to earth. I believe they'll settle back to attendance of 2019 after this baring a recession. I also think that the state of Europe will keep more Americans from travelling internationally in the short term, which could also benefit Disney for the foreseeable future

 

[SuzErwin]

I believe that Disney has been acting as the assessor on all of that land, and contributing based on their own assessment.

No. The Orange and Osceola Property Appraisers assess the taxes. In fact, Disney overpaid Orange County property taxes from 2015 - 2019 and won a refund. Sea World and Universal also challenged their tax bills.

Disney paid over $280 million in property taxes to the counties between 2015 and 2020.

 

[Ms Bibbidi]

I disagree. I don't think they are going to close or go bankrupt but I think it will be awhile before things get turned around. Right now the parks are packed due to revenge travel going on. Once that's over I think the parks will be in for a down turn for a few years.

I do not have any expertise in this, but the demographics probably say the park crowding is going to be a thing. Even Walt Disney World has finite space, but the huge millennial generation are now parents and bringing bringing their kids. The Boomers were grade school kids when Disneyland opened. Disney has not kept up building US park space. They don't just need a fifth gate. They need a third park in the US. California, Florida and (?)! Texas? Colorado? If they keep it generationally appealing, family friendly and inclusive too, they have a great thing going. I feel sorry for them. Those are serious tightropes. If I had to advise them I would say be supportive to your employees, but stay in your lane. I don't know. I hope they have better people to advise them than me.

 

[71 Truck]

My wife and I purchased Disney stock back in the mid 90s and still hold it to this day. In that time we have seen it as low as the mid teens and as high as I think around 200 dollars. To this day we are still ahead however the stock has lost a huge amount of value to us. This was never meant for us to retire on however there are many people who depend on the value of the stock and dividend as part of their retirement.

I met a gentleman who at one time had enough Disney stock when it was around $200.00 dollars a share that his investment was just under $1,000,000 now it would be worth just over $400,000 dollars. For him that would have been a significant loss.
Disney also has not paid a dividend in almost 2 years and once again some people depend on that money as part of their retirement income.

To me this is a big problem when public corporations forget one of their biggest responsibility is to the share holders.

I was watching an interview with the past CEO of Mc Donalds and he was once told that, and I am going to paraphrase this, that " corporations need to stay out of politics and social engineering and concentrate on making money for their share holders and let the share holders spend their money on what ever they want"

In the end, in my opinion, if corporate CEOs would just stay neutral on these types of subject mater they would not have some of the problems we are now talking about and it is not just Disney.

 

[Disney Bobby]

Maybe Disney now understand how Gina Carano felt. Karma.

 

[Aluminum Falcon]

Maybe Disney now understand how Gina Carano felt.

You’ve waited patiently to get that one in

 

[Ms Bibbidi]

I disagree. I don't think they are going to close or go bankrupt but I think it will be awhile before things get turned around. Right now the parks are packed due to revenge travel going on. Once that's over I think the parks will be in for a down turn for a few years.

Mmmm. Disney tends to be pretty recession proof. In fact, sometimes they do well in a period of high inflation and then a recession; like in the 1970s and early 1980s.

 

[Disney Bobby]

The best thing Disney could do is clean house and get neutral leadership in that cares about making money for shareholders and delivering the best Disney park experience for their guest.

Magic Matters.

 

[Jrb1979]

Mmmm. Disney tends to be pretty recession proof. In fact, sometimes they do well in a period of high inflation and then a recession; like in the 1970s and early 1980s.

That was before. I think once Epic Universe opens it will change a lot of things. I know it's anecdotal but there are already a lot of Disney loyalists that have opted for Universal recently.